Eurozone unemployment has fallen below 10 per cent for the first time since 2009, as the European Commission revised down September’s unemployment rate to 9.9 per cent.
The unemployment rate for October now stands at 9.8 per cent, 0.8 points lower than the same point last year.
The figures still show a large deficit in employment for people under the age of 25 – which could affect Eurozone productivity growth in years to come – with 20.7 per cent still without a job. The rate of unemployment for women was 0.6 points higher than for men.
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The euro’s reaction was mixed, as positive economic data was overshadowed by oil market moves following Opec’s historic decision to cut production. The euro spot exchange rate rose in value against the dollar to $1.0623 at publication time, a gain of almost a third of one per cent. However, it fell in value against the pound after Brexit secretary David Davis said the UK might pay for Single Market access.
Euro area unemployment peaked in 2013 above 12 per cent during the depths of the Eurozone crisis. Since then it has fallen gradually as a recovery has slowly gained momentum.
“While caution is still warranted, the Eurozone’s performance is beginning to look like a genuine, if soft, recovery,” said Alasdair Cavalla, senior economist at the Centre for Economics and Business Research.
The data, as well as today’s positive purchasing managers’ index (PMI) results, add to European Central Bank president Mario Draghi’s contention that ultra-low interest rates are slowly doing their job of stimulating growth and reducing unemployment.
The bank meets next week to decide interest rates, as well as whether to continue its programme of quantitative easing – buying private bank bonds to free them to lend to businesses – beyond March 2017. The bloc could face significant political upheaval in the next six months.
“A concern going forward is that heightened political uncertainty could weigh down on business confidence and lead to increasing caution over employment (and investment),” said Howard Archer, chief UK and European economist at IHS Markit.